Do I sell US stocks before dividends payout to not get taxed? Or what do people usually do? - Seedly
 

Online Brokerages

Stocks Discussion

Stocks

Asked by Anonymous

Asked on 15 Sep 2019

Do I sell US stocks before dividends payout to not get taxed? Or what do people usually do?

I’m using an online broker to buy Apple stock, but from what I know there is a 30% tax on dividends for US stocks.

Do I sell the stocks before dividends payout to not get taxed? Or what do people usually do?

0

Answers (2)

Sort By

Most Upvote

  • Most Upvote
  • Most Recent
Jacqueline Yan
Jacqueline Yan
Level 4. Prodigy
Updated 3w ago

I'm not investing in US stocks at the moment, but from what I read, some people will choose to reinvest their dividends. This way, they won't get taxed for their dividends, and they will also be able to buy more shares.

3 comments

1

See all 3 comments

Jacqueline Yan
Jacqueline Yan

3w ago

Oh no, sorry for the misinformation!
Hariz Arthur Maloy
Hariz Arthur Maloy

3w ago

No worries, it's a common misunderstanding.
Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 6. Master
Answered on 15 Sep 2019

The withholding tax is on the dividends only and not on your holdings on AAPL stock. So, for example, they declare 1 dollar dividend per share, you will get 70 cents in dividend due to withholding.

Personally, it doesn't make sense to sell the stock before the stock record date so as not to be hit by withholding tax. You will have to do it 4 times a year for 8 transactions in total (4 X buy/sell) as dividends are given quarterly. Not only this but you won't be entitled to the dividend as well. Don't think people will do as what you described, sorry to say.

0 comments

0